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Trinity Capital Plc, the AIM-listed real estate fund focused on India, has reached a settlement with its former fund managers Trikona Advisers Limited in a dispute that has lasted for more than a year. Both parties will withdraw claims against one another, and Trinity Capital will make payments to Trikona which were not disclosed.

“Under the terms of the settlement agreement Trinity will make certain payments to Trikona in cash and other consideration, the terms of which are confidential. Under the settlement, the Trinity group, the Trikona group and Trikona’s founders, Aashish Kalra and Rak Chugh, will withdraw all claims made against one other,” said the statement filed with London’s Alternate Investment Market.

In December 2009, Trinity Capital said it would terminate the PMA (portfolio management agreement) with Trikona Advisers citing “breaches”. Trinity, which was earlier called Trikona Trinity Capital, last year appointed Ajay Piramal Group-promoted Indiareit Investment Management Company (Indiareit) as its investment manager in India.

After its removal, Aashish Kalra and Rak Chugh-led Trikona Advisers said it will seek to recover damages and lodge a claim with the London Court of International Arbitration for £112 million for “the unlawful attempt by Trikona Trinity to terminate its management agreement with the Fund six years early.”

Trinity also intends to make a further distribution to shareholders and will make an announcement after the board meeting on 17 February 2011. Trinity has made several exits which include Pipavav Shipyard Ltd, DB Hospitality and IL&FS Transportation Networks, among others. Some of its portfolio companies like DB Realty were also listed in the last one year.

“The dispute was a commercial one and with this settlement both parties can continue to move forward in their respective endeavours,” said Martin Adams, Chairman of Trinity. “Trikona and its investment management team played a key role in creating the value present in Trinity today. The settlement will have no material impact on NAV as it has been covered by provisions previously made by Trinity. The Board can focus on releasing value now and in the future for our shareholders.”

In the middle of these developments, both Trinity Capital and Trikona Advisers are facing a claim of €116 million ($168 million) from a large German investor called SachsenFonds Holdings GmbH. Trikona Trinity had entered into a number of transactions with SachsenFonds to divest its stake in various portfolio companies in 2007 and 2008. No update was given on this lawsuit in the statement.